What Is Included in "Consumption Expenditure"?

What Is Included in "Consumption Expenditure"?

"Consumption expenditure" is a term used for the component of the GDP or gross domestic product. Find out what is included in "consumption expenditure" with help from a senior financial analyst in this free video clip.

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Hi, I'm Jackie Jackson, and I'm going to talk to you about what is included in consumption expenditure. Final consumption expenditure is the term used for the component of GDP or gross domestic product that refers to all of the money that Americans spend on goods and services intended to meet individual needs verses business needs and again this is a macro-economic indicator. GDP is a very important measure of how healthy our economy is. So we're looking at final consumption expenditure. We're looking at how much money is being spent and there are 3 primary components of this which are the government expenditures, non-profit expenditures, and the most significant component which is household final consumption expenditure or HFCE which refers to all of the money that household spends on goods and services.